Perfecting Service Management

Issue #38

Tuesday, February 17, 2004

Managing the Enterprise Customer Relationship
(Part 1)
by Craig Bailey
 

Managed service providers (MSPs) face common challenges and opportunities in the management of complex relationships while delivering solutions to the enterprise customer. In this series, we will cover several important aspects of "Managing the Enterprise Customer Relationship."

Companies in the high-tech/MSP industry often focus their Sales and Marketing efforts primarily on product "feature/function." Significant investments are poured into adding new bells and whistles to the product. Keep in mind, features and functions are an important focus when introducing a new product. Moreover, for a company's product to remain progressive, it must have updated features and functions. However, for an MSP, features soon become a commodity, putting the MSP in the position of competing solely on price and missing the mark in meeting customers' expectations.

Delivering value beyond the product features and functions will differentiate your company from the competition and enable you to meet or exceed customer expectations.  This extra value is created when you effectively align your resources to truly "manage" the customers' experience. Isn't this what the customer of a managed service provider is expecting?

Let's play out a scene that demonstrates the DIRECT result of not effectively managing the enterprise customer relationship:

You are an MSP. One of your customers has experienced continued business growth, leading to increased use of your service/solution. The customer's technical resources are in daily communication with your service team working (what appear to be) "minor performance issues." Your service reps do their best, efficiently processing "tickets" that document individual (yet recurring) incidents experienced by the customer. During a particular incident, a service representative casually remarks "I think it is time you upgrade your memory (or CPU, disk, operating system, software revision, etc.)." The customer's technical contact isn't authorized to approve this "casually suggested" upgrade, and besides, he knows that if the problem occurs again, he can count on your service team to respond. Upon hanging up (problem presently resolved), each moves on to the next item on their list. Neither person is feeling any particular ownership of the "recurring issue." This cycle happens with increasing intensity until…the customer hits a wall: the "solution" goes down during prime business hours. You are unable to immediately bring the solution back online, causing the customer significant business impact.

Who is to blame? You, the Managed Services Provider. What went wrong? Your resources were not aligned to manage the customer's whole experience.

Have you seen this movie before? Do you like the ending? There is a better way…

To understand how to properly align your resources, you must first understand some dynamics of the players involved. In the next issue, we will present the "Four Quadrants of the Customer Relationship." Upcoming issues will discuss approaches to ensure you experience a better ending.

If you would like to learn more about overcoming the common challenges that managed service providers face with their enterprise customers, and would prefer not to wait until the completion of this series of our newsletter, feel free to contact us. We would be happy to brainstorm with you on the challenges and opportunities you are facing and share proven approaches that have helped managed service providers address similar situations.

View previous articles in this series

A Logistics Perspective (Part 3): Becoming -- and Remaining -- a Preferred Supplier
by Craig Thompson

We have talked about Preferred Suppliers as those perceived by their customer as being easy to do business with and who provide higher service value than their competitors. We looked at some characteristics typically shared by preferred suppliers; specifically that they do a good job, minimize the effort and cost of supply, and act as good partners conscientiously ensuring effective communications and common understandings. We also acknowledged that these considerations involve humans, ensuring a certain potential of irrationality compounding the "quirkiness" normally associated with perception.

From the logistics perspective, it's safe to conclude that becoming and remaining a better performing supplier than your competitors is one of the higher-percentage roads to preferred supplier status. Another advantage of this approach is that it is the least susceptible to falling in and out of favor with the customer. The trickier part lies in knowing when you are better (so you can work on making your customer see that you are) or, obversely, when you're not and why (so you know what to fix). In this and the next article, we present 4 suggested strategies for becoming, and remaining, a preferred supplier.

Strategy 1 – Talk to Your Customer

A good place to start is usually your customer, who probably knows what supplier actions are valued and can fill you in on his perception of how well or badly you're doing. A note of caution: Be sure the review is thorough and that it covers all aspects of your supply performance. Avoid getting bogged down in anecdotes of specific problem areas, further eroding perception. Be prepared that your customer, quite naturally, wants to dwell on your relative weaknesses rather than extol your virtues.

It's a good idea to take along a checklist, one that you used in preparing for this review by filling in your side of the form with the facts as you know them along with your expectation of your customer's views. The checklist needs to include your metrics for the various service goals you prioritize, other measures that may be utilized by your customer, and business review information including volume growth, special requests that were met, order management and other systems improvements, etc. When you have finished the meeting, document the results to all parties present and quickly follow up on any points of disagreement and misaligned data. Get back to everyone with clarifications and corrections. This will put both you and your customer are on the same page and ensure you understand where problems and issues lie and that your customer is aware of your strengths.

Where problems and issues are identified, it is important to devise solutions and create action plans identifying how and when they will be achieved. These need not (and maybe should not) be decided at the meeting, but they must be timely in their preparation, in their communication back to the customer and in their enaction to demonstrate responsiveness and the strong desire to service your customer well.

Strategy 2 – Talk to Your Partners

Collaboration is a way an enterprise corresponds with its supply chain partners. As an ideal, it depicts a relationship in which partners jointly devise better plans by sharing information and decision-making. In practice it can mean as little as the willingness of trading partners to exchange little more than requirements and fulfillment commitments so as to increase long-term supply and demand planning horizons. Whichever view is yours, it points in the right direction. Unfortunately, as a buzz word, collaboration is advertised as a relationship that is just between you and your customer. Restricting its application to just that channel also restricts the range of benefits that are available. To readers of this newsletter, the advantages of the broader view are obvious.

We have all heard the expression that "companies don't compete, supply chains do." That may be an extreme view, but I have seen the 2nd half of the expression bear out numerous times; namely, that "supply chains compete." As a long-time user and proponent of outsourcing, I have repeatedly enjoyed the luxury of having another company help me solve my problems and extend my capabilities. This is particularly relevant to striving for performance improvement when that company has additional expertise and the wherewithal to apply it. There are a lot of supply considerations and it can be very expensive to be great at all of them. If you chose your service providers well, they are experts in their field and they also want to be your preferred supplier.

In the next installment, we will discuss 2 more strategies. The final chapter of this series will present some of the more common pitfalls incurred in striving for Preferred Supplier status without proper motivation, planning and guidance.


View previous articles in this series.

Contents
Managing the Enterprise Customer Relationship

Recommended Reading

Becoming -- and Remaining -- a Preferred Supplier

White Paper: Driving Continuous Improvement Efforts

 


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Recommended Reading


In his CRM Magaizine article "Vendors Don't Deserve Customer Loyalty,"  David Myron discusses the results of a recently released study by Strativity Group that examined executive attitude toward customer loyalty and customer experience management. According to Mr. Myron:

The report, "Customer Experience Management Study," details the findings of a year-long polling effort of 165 executives, from the vice president and director level on up the corporate ladder. The results paint a grim picture of customer understanding on behalf of executives at large, global companies.

Read the article

See the Additional Resources section of the Customer Centricity website for more recommended reading selections.

White Paper:
Driving Continuous Improvement Projects


If you like our articles, you'll love our white papers! Our editing team has been hard at work generating white papers from the many articles we've written over the last year.

This issue's featured white paper is "Driving Continuous Improvement Efforts" by Craig Bailey.

Once you have identified the continuous improvement projects required to take you from where you are to where you want to be, what's next? This white paper discusses what obstacles to watch out for, and offers suggestions for successfully managing and completing these important projects.

See the Additional Resources section of the Customer Centricity website for more white paper selections.


About Customer Centricity, Inc.
We strengthen overall company performance through better service delivery and management.

We boost efficiencies in front-line customer service and technical support teams, order processing, fulfillment, field service, logistics and other key operations functions.

In short, we align the resources of your organization to exceed your customers' expectations in the most effective and efficient manner possible.

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